Bandit Experiments

Quant Quanto February 17, 2016

*How much do you trust a multi-armed bandit to run experiments...?*

The MAB Problem Formulation: The problem of dynamic pricing with limited supply is considered. A seller has k identical items for sale and is facing n potential buyers ("agents") that are arriving sequentially. Each agent is interested in buying one item. Each agent's value for an item is an IID sample from some fixed distribution with support [0,1]. The seller offers a take-it-or-leave-it price to each arriving agent (possibly different for different agents), and aims to maximize his expected revenue. It has been recognized by Babaioff et. al. that even in a setting with limited supply, the Multi-Armed bandit (MAB) approach can still be fruitfully applied.

*Soldiers or bandits? It may not be that easy to tell them apart when they're at rest...*

The Manchurian Bannermen is a hereditary occupational caste, ranked above others in society, whose members were expected to devote themselves to the state. In China proper, bannermen did not cultivate the fields (as they had in Manchuria) but rather lived off stipends, paid part in silver and part in grain. The dynasty supported banner soldiers and their families from cradle to grave, with special allocations for travel, weddings, and funerals. The banner population grew faster than the need for soldiers. Within a couple of generations, there were not enough positions in the banner armies for all adult males in the banners. Yet bannermen were not allowed to pursue occupations other than soldier or official. Consequently, many led lives of forced idleness, surviving on stipends.

References:

Babaioff, Moshe, Dughmi, Shaddin, Kleinberg, Robert and Slivkins, Aleksandrs (2013). Dynamic Pricing with Limited Supply. Retrieved from: http://arxiv.org/abs/1108.4142
Porter Eduardo and Farhad Manjoo (2016, March 8). A Future Without Jobs? Two Views of the Changing Workforce. New York Times. Retrieved from: http://www.nytimes.com/2016/03/09/business/economy/a-future-without-jobs-two-views-of-the-changing-work-force.html
Rotman, David (2016, March 11). The Danger of the Universal Basic Income. MIT Technology Review. Retrieved from: https://www.technologyreview.com/s/601019/the-danger-of-the-universal-basic-income/

Community Currency

Quant Quanto February 16, 2016

Community currency allows localities and regions to create real wealth in their local economy by matching the unmet needs (e.g., offer people employment, and to pay for local services like education, health care, fire and police protection, and road maintenance, etc.) with the under-utilized resources available that could fill those gaps. The main barrier to matching the unmet needs with the underutilized resources is often a lack of money.

Community currency also provides a way for the wealth that is produced locally to benefit local people, rather than being siphoned off to distant companies. This is because community currency circulates only locally and is not legal tender outside of its immediate community.

*Double Speed: How fast did you say the Oars were going again?*

Toda Oar, for instance, is a community currency used in Toda City in Saitama Prefecture, near Tokyo. The Oar is issued and managed by the Community Currency Toda Oar Management Committee, which is staffed by volunteers. First issued in 2003, the purpose of the Oar was to revitalize citizen activity and encourage mutual assistance. The unit of this currency is the Oar (i.e., equivalent to one yen). Both 10-Oar and 100-Oar bills are in circulation. As observed by Kurita et. al., people’s favorable perception of their own community currency drives its circulation, and thus helps revitalize the local economy.

Establishing the circulation system for a new community currency so it does not "pool" in particular parts of the system. (Source: Community Currency Guide). — *Establishing the circulation system for a new community currency so it does not "pool" in particular parts of the system. (Source:* *Community Currency Guide*).

Complementary currencies in circulation all have curative power in their communities (Source: de la Rosa and Stodder). — *Complementary currencies in circulation all have curative power in their communities (Source:* *de la Rosa and Stodder*).

Velocity of complementary currencies (circa 2012). In 2014, Bitcoin (not shown) is by far the speed king at 36! (Source: de la Rosa and Stodder). — *Velocity of complementary currencies (circa 2012). In 2014, Bitcoin (not shown) is by far the speed king at 36! (Source:* *de la Rosa and Stodder*).

Comparative velocity of fiat currencies in the world economy (circa 2004~2012). (Original Source: World Bank). — *Comparative velocity of fiat currencies in the world economy (circa 2004~2012). (Original Source:* *World Bank*).

References:

Kurita, Ken-ichi, Yoshida, Masayuki and Miyazaki, Yoshihisa (2015). What kinds of volunteers become more motivated by community currency? Influence of perceptions of reward on motivation. IJCCR 19 (D) 53-61. Retrieved from: http://ijccr.net/2015/03/08/what-kinds-of-volunteers-become-more-motivated-by-community-currency-%E2%80%A8influence-of-perceptions-of-reward-on-motivation-2/
de la Rosa, Josep Lluis and Stodder, James (2015). On Velocity in Several Complementary Currencies. IJCCR 19 (D) 114-127. Retrieved from: http://ijccr.net/2015/02/25/on-velocity-in-several-complementary-currencies/
Gómez, Georgina (2015). Multiple Moneys and Development. International Journal of Community Currency Research, Volume 19 (2015) Special Issue (Section D). Retrieved from: http://ijccr.net/category/volume/19-2015-special-issue/
Lietaer, Bernard (2004). Complementary Currencies in Japan Today: History, Originality and Relevance. IJCCR, Volume 8 (2004). Retrieved from: http://www.lietaer.com/images/JapanCC_2003.pdf
Lietaer, Bernard and Hallsmith, Gwendolyn. Community Currency Guide. Retrieved from: https://www.community-exchange.org/docs/Community_Currency_Guide.pdf
Lietaer, Bernard. Currency Solutions for a Wiser World. Retrieved from: http://www.lietaer.com/
Greco Jr., Thomas H. Beyond Money. Retrieved from: http://beyondmoney.net/

Binero vs. Dinero

Quant Quanto February 15, 2016

“Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!”

— The Red Queen (“Alice Through the Looking Glass”)

*Through the Looking Glass: What might we find?*

*No? ... hmm, which side did you say am I on again?*

“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.”

— R. Buckminster Fuller (1895-1983)

Basic Income?

Quant Quanto February 15, 2016

“Do we have to behave in particular ways to justify compassion and support? Or is simply human dignity enough?”

— Evelyn Forget

A "Millennial Hamster Tribe" member running in place trying to break free... — *A "Millennial Hamster Tribe" member running in place trying to break free.*..

*Solidarity among millennials facing an uncertain future: not everyone can be a card-carrying member of the "Millennial Hamster Tribe"!*

“A lot of our social services were based on the notion that there are a lot of 40 hour-per-week jobs out there, full-time jobs, and it was just a matter of connecting people to those jobs and everything will be fine. Of course, one of the things we know is that’s certainly not the case, particularly for young people who often find themselves working in precarious jobs, working in contracts for long periods of time without the benefits and long-term support that those of us who have been around longer take for granted.”

— Evelyn Forget

“Faith is the number one element. It isn’t something that spreads itself uniformly. Faith is concentrated in a few people at particular times and places. If you can involve young people in an atmosphere of hope and faith, then I think they’ll figure out how to get the answer. Faith and hope are absolutely central to everything one does.”

— John Archibald Wheeler (1911-2008)